dabozza,I would have thought that an option that had an exercise...

dabozza,

I would have thought that an option that had an exercise price of 34 cents doesn't have any immediate value if all shares were purchased at 34 cents under a takeover or scheme of arrangement because the holder would have to pay the 34 cents exercise price for a share that was worth 34 cents. Quite different if there was a performance right that had been granted that vested once the share price hit 34 cents, in which case the holder of the right would get a share worth 34 cents without having to pay anything for it?

If the option has an expiry date that extends out past the takeover or scheme date, the acquirer may have to offer a sweetener to have the holder to agree to cancel their option earlier - e.g. they may be paid 10 cents for the option to compensating them for giving away the potential for future upside.

Have I missed something?